Human rights lawyer Amal Clooney has said she is "absolutely delighted" that the Egyptian president has pardoned two journalists for Al-Jazeera English.
The state-run MENA news agency said a third person from the case, which included a number of other defendants along with Australian journalist Peter Greste, was also pardoned but was not identified by name. Mr Greste was deported earlier this year.
The pair - Canadian journalist Mohamed Fahmy and Egyptian national Baher Mohammed - were among about 100 people pardoned by president Abdel-Fattah el-Sissi on the eve of the major Muslim holiday of Eid al-Adha, and are expected to be released later today.
International counsel for Mr Fahmy, Mrs Clooney said she was "absolutely delighted" the journalists had been pardoned.
She said it had been a long ordeal, and Mr Fahmy's lawyers were grateful to the president for exercising his power to pardon.
She added: "This is a historic day in Egypt where the government has finally corrected a long-standing injustice, and set two innocent men free."
A tweet from Mr Fahmy's account read: "Thank you to all the supporters sending us the news, we have heard and are very happy. AJ Staff is Free!"
Mr Fahmy's brother Adel said: "I don't know what to say. It is done. Thank God, thank God."
The three journalists were sentenced to three years in prison last month for airing what a court described as "false news" and biased coverage.
The pardon also comes a day before the president is to travel to New York to attend the United Nations General Assembly.
On Tuesday in Australia, Mr Greste attended the dedication of a war correspondents' memorial at the Australian War Memorial in Canberra. Prime minister Malcolm Turnbull spoke to him and said he would press Egypt for a pardon for him and his colleagues, according to Mr Turnbull's Facebook page.
The case against the three embroiled their journalism in the wider conflict between Egypt and Qatar following the 2013 military ousting of Islamist president Mohammed Morsi.
It began in December 2013 when Egyptian security forces raided the hotel suite used by Al-Jazeera at the time to report from the country.
Authorities arrested the trio, later charging them with allegedly being part of Mr Morsi's Muslim Brotherhood, which authorities have declared a terrorist organisation, and airing falsified footage intended to damage national security.
Since Mr Morsi was ousted, Egypt has cracked down heavily on his supporters and the journalists were accused of being mouthpieces for the Brotherhood.
Al-Jazeera and the journalists denied the allegations, saying they were simply reporting the news.
The three men were convicted on June 23 2014, with Mr Greste and Mr Fahmy sentenced to seven years in prison and Mr Mohammed to 10 years.
The verdict brought international condemnation and calls for the newly-elected president to intervene.
Egypt's Court of Cassation, the country's highest appeals court, later ordered a retrial, saying the initial proceedings were marred by violations of the journalists' rights.
Two British journalists, Sue Turton and Dominic Kane, have previously been tried in their absence, and found guilty.
Amnesty International said the presidential decree granting pardons to 100 people was welcome news, but represented a token gesture while hundreds of others remain detained.
It said the pardons should be followed by further action to address Egypt's "appalling" human rights record.
The organisation's Middle East and North Africa deputy director Said Boumedouha said: "While these pardons come as a great relief, it is ludicrous that some of these people were ever behind bars in the first place.
"Those pardoned today include only a tiny fraction of the hundreds of people across the country who have been arbitrarily arrested, and unlawfully detained.
"These pardons will be little more than an empty gesture if they are not followed up by further releases of those arbitrarily detained, respect for the right to freedom of expression and assembly, and accountability for perpetrators of gross human rights violations.
"Hundreds remain behind bars for protesting or because of their journalistic work. All those jailed for peacefully exercising their right to freedom of expression, assembly and association or because of their journalistic or human rights work must have their convictions quashed and be immediately and unconditionally released."